Post by Todd B on Apr 3, 2009 18:21:28 GMT -5
Ida co-op's profit in '08 cut in half
monroenews.com/article/20090403/NEWS01/704039984/-1/NEWS
IDA - Most farmers would agree fertilizer prices couldn't have gone much higher last year.
"I've been in the business since 1971, and those were the highest prices I can remember," Michael thingy, manager of the Ida Farmers Cooperative, said after Thursday's 87th annual dinner-meeting.
The soaring fertilizer prices plus a lack of rain during the summer that severely cut into corn and soybean yields last fall took their toll on co-op earnings in 2008.
In fact, income for the fiscal year ending Dec. 31 - $300,519 - was less than half of the $620,605 profit earned in 2007 and $95,376 short of the income in 2006. It did top the $243,836 earned in 2005 and was $130,534 ahead of the $170,361 profit in 2004.
A $379,378 loss in revenue from fertilizer prices plunging at the end of the year didn't help matters any. The co-op bought a variety of fertilizers last spring for growers to buy, but when the prices dropped, the sale price fell below cost, auditor Hal March said.
"There are forces you can't control or anticipate," like the price of fertilizer, Mr. March told about 180 guests at the Ida High School cafeteria. "That unfortunate circumstance affected your net margins and patronage dividends for 2008. Without that, your (profit) would have been the same as last year."
This year's patronage stock dividend is 1.888 percent. Patronage refunds totaling about $98,700 will be mailed to shareholders around May 1, plus $192,000 in dividends from a 1994 reserve allocation for those who were members then. That compares to $212,000 in dividends for 2008, $133,726 in 2007 and $86,387 in 2006.
Potash dropped $245 a ton and 28 percent nitrogen fell more than $190 a ton by year's end, Mr. thingy said.
"These high prices started dropping when the banks were" failing, he noted. "The market just collapsed between September and December."
The drought that affected much of Michigan agriculture reached disaster levels in some regions, including Monroe County, he said.
"The rains came too late and yields were not like they were" the year before, the auditor said. "Volume of grain was down. The co-op profit is only a few cents per bushel, and there are so many fixed costs."
The number of loads of grain delivered in 2008 to the Ida elevator totaled more than 3,700, a decrease of about 135 from 2007, Mr. thingy said. A total of 1.9 million bushels were brought to the elevator, down about 81,000 bushels from the prior year.
"The number of bushels delivered directly to other terminals in Riga, Toledo and elsewhere was 683,763 bushels, a decrease of 479,000 from the previous year," the manager said. "We had great yields the year before," but not this time.
Sales from grain sold totaled $15.7 million, which actually topped the 2007 mark by $429,000. "Grain prices were higher," Mr. thingy said.
The average price paid for red wheat last fall was $5.98 a bushel, which amounts to 7 cents a bushel patronage for those who worked with the elevator. Corn prices averaged $4.23 a bushel, which produced a 5-cent-a-bushel patronage, and soybeans averaged $10.56 a bushel, which yielded a 12.5-cent-a-bushel patronage.
Growers who bought fertilizer at $500 a ton earned a patronage dividend of $5.93 a ton. If they bought fertilizer at $1,000 a ton, the dividend was $11.86 a ton.
Total fertilizer sales amounted to $5.6 million, an increase of $1.16 million from the previous year. About 12,180 tons were sold last year, down about 3,500 tons from 2007.
The elevator spread dry fertilizer on 31,700 acres, down 4,900 acres from the year before. Custom spraying of fertilizer was done on nearly 32,000 acres, which rose 1,500 acres from 2007.
Income from total services (including drying grain, grinding feed and cleaning seed) amounted to $909,156, up $15,633 from the previous year. Storage income totaled $222,618, up $30,000, but drying income fell by $10,000 to $230,224 for the year.
Feed sales totaled $679,424 in 2008, about $135,00 more than 2007. Total expenses for 2008 amounted to $2 million, up $46,210 from 2007. Employee wages rose $19,000, but utility expenses dropped $42,500 due to less corn being dried.
The co-op is spending about $37,000 to finish cleanup of three acres near Van Aiken St. and Ida West Rd. it purchased from the Monroe County Road Commission that was contaminated. Another $11,600 was spent to remove about 3,000 trees on the land.
The most visible capital improvement is an ongoing project to remodel the office off Lewis Ave. that involves flip-flopping the product showroom with the offices. Also, the old wooden floor is being ripped out and replaced with a new one. The improvements should be completed in about three weeks.
monroenews.com/article/20090403/NEWS01/704039984/-1/NEWS
IDA - Most farmers would agree fertilizer prices couldn't have gone much higher last year.
"I've been in the business since 1971, and those were the highest prices I can remember," Michael thingy, manager of the Ida Farmers Cooperative, said after Thursday's 87th annual dinner-meeting.
The soaring fertilizer prices plus a lack of rain during the summer that severely cut into corn and soybean yields last fall took their toll on co-op earnings in 2008.
In fact, income for the fiscal year ending Dec. 31 - $300,519 - was less than half of the $620,605 profit earned in 2007 and $95,376 short of the income in 2006. It did top the $243,836 earned in 2005 and was $130,534 ahead of the $170,361 profit in 2004.
A $379,378 loss in revenue from fertilizer prices plunging at the end of the year didn't help matters any. The co-op bought a variety of fertilizers last spring for growers to buy, but when the prices dropped, the sale price fell below cost, auditor Hal March said.
"There are forces you can't control or anticipate," like the price of fertilizer, Mr. March told about 180 guests at the Ida High School cafeteria. "That unfortunate circumstance affected your net margins and patronage dividends for 2008. Without that, your (profit) would have been the same as last year."
This year's patronage stock dividend is 1.888 percent. Patronage refunds totaling about $98,700 will be mailed to shareholders around May 1, plus $192,000 in dividends from a 1994 reserve allocation for those who were members then. That compares to $212,000 in dividends for 2008, $133,726 in 2007 and $86,387 in 2006.
Potash dropped $245 a ton and 28 percent nitrogen fell more than $190 a ton by year's end, Mr. thingy said.
"These high prices started dropping when the banks were" failing, he noted. "The market just collapsed between September and December."
The drought that affected much of Michigan agriculture reached disaster levels in some regions, including Monroe County, he said.
"The rains came too late and yields were not like they were" the year before, the auditor said. "Volume of grain was down. The co-op profit is only a few cents per bushel, and there are so many fixed costs."
The number of loads of grain delivered in 2008 to the Ida elevator totaled more than 3,700, a decrease of about 135 from 2007, Mr. thingy said. A total of 1.9 million bushels were brought to the elevator, down about 81,000 bushels from the prior year.
"The number of bushels delivered directly to other terminals in Riga, Toledo and elsewhere was 683,763 bushels, a decrease of 479,000 from the previous year," the manager said. "We had great yields the year before," but not this time.
Sales from grain sold totaled $15.7 million, which actually topped the 2007 mark by $429,000. "Grain prices were higher," Mr. thingy said.
The average price paid for red wheat last fall was $5.98 a bushel, which amounts to 7 cents a bushel patronage for those who worked with the elevator. Corn prices averaged $4.23 a bushel, which produced a 5-cent-a-bushel patronage, and soybeans averaged $10.56 a bushel, which yielded a 12.5-cent-a-bushel patronage.
Growers who bought fertilizer at $500 a ton earned a patronage dividend of $5.93 a ton. If they bought fertilizer at $1,000 a ton, the dividend was $11.86 a ton.
Total fertilizer sales amounted to $5.6 million, an increase of $1.16 million from the previous year. About 12,180 tons were sold last year, down about 3,500 tons from 2007.
The elevator spread dry fertilizer on 31,700 acres, down 4,900 acres from the year before. Custom spraying of fertilizer was done on nearly 32,000 acres, which rose 1,500 acres from 2007.
Income from total services (including drying grain, grinding feed and cleaning seed) amounted to $909,156, up $15,633 from the previous year. Storage income totaled $222,618, up $30,000, but drying income fell by $10,000 to $230,224 for the year.
Feed sales totaled $679,424 in 2008, about $135,00 more than 2007. Total expenses for 2008 amounted to $2 million, up $46,210 from 2007. Employee wages rose $19,000, but utility expenses dropped $42,500 due to less corn being dried.
The co-op is spending about $37,000 to finish cleanup of three acres near Van Aiken St. and Ida West Rd. it purchased from the Monroe County Road Commission that was contaminated. Another $11,600 was spent to remove about 3,000 trees on the land.
The most visible capital improvement is an ongoing project to remodel the office off Lewis Ave. that involves flip-flopping the product showroom with the offices. Also, the old wooden floor is being ripped out and replaced with a new one. The improvements should be completed in about three weeks.